Chinese shares .CSI300.SSEC dropped 0.4 percent ahead of data expected to show that foreign exchange reserves fell for the seventh straight month by about $10.5 billion to $3 trillion in January.

But some economists said reserves may have actually risen due to tighter controls on moving money out of the country, as well the impact of a weaker dollar.

Nevertheless, as foreign exchange reserves linger at around $3 trillion, concerns remain over the speed at which China has depleted its cash resources to defend the currency.

Overnight, both U.S. and European stocks dropped.

Wall Street dipped as much as 0.2 percent, led lower by the energy sector as oil prices fell, with investors still waiting for details of U.S. President Donald Trump's economic policies.

"The market's tone has been one of risk-off, as political fallout in both Europe and the United States is weighing on investor resolve, imposing an unpalatable risk on investor sentiment," Stephen Innes, senior trader at OANDA in Singapore, wrote in a note.

Declines in European shares came on the heels of the French presidential campaign launch of far-right National Front Leader Marine Le Pen on a platform pledging to fight globalization and take France out of the European Union.

French stocks .FCHI lost 1 percent, and yields on 10-year French government bonds hit their highest level since September 2015.

"Despite the reaction in the French yields, polls show Le Pen would finish runner-up by a wide margin to either Independent Emmanuel Macron or Republican Francois Fillon," James Woods, global investment analyst at Rivkin Securities in Sydney, wrote in a note.

The euro EUR=EBS fell 0.3 percent to $1.0714 on Tuesday, after dropping as much as 0.7 percent the previous day to a near one-week low before recovering to close down 0.3 percent.

The dollar added about 0.1 percent to 111.845 yen JPY= on Tuesday, recovering some of its 0.8 percent loss from Monday.

The dollar index .DXY, which tracks the greenback against a trade-weighted basket of its peers, was steady at 99.907, retaining its small gains of almost 0.1 percent from Monday.

The Australian dollar AUD=D4 reversed earlier losses to rise 0.25 percent to $0.7679 after the Reserve Bank of Australia kept interest rates on hold at a record low 1.5 percent as expected, and played down a recent soft patch in economic growth as a temporary hiccup.

The New Zealand dollar NZD=D4 jumped 0.5 percent to $0.7363, after earlier touching a near a three-month high of $.0.7375.

Reserve Bank of New Zealand Governor Graeme Wheeler said on Tuesday he would not seek a second term when his current term ends on Sept. 26. Deputy Governor Grant Spencer will fill in for six months while a permanent replacement is sought.

Oil prices inched higher on Tuesday after posting their biggest one-day loss since Jan. 18 on Monday, as worries about rising oil supply out of the United States tussled with optimism about output curbs elsewhere.

U.S. crude CLc1 gained 0.1 percent to $53.07 a barrel, after falling 1.5 percent on Monday.